Sales Price dispersion Advertising Clearinghouse Utility space
European Economic Association
SHELEGIA, S. and WILSON, C.M., 2016. Sales competition with heterogeneous firms. Presented at the 31st Annual Congress of the European Economic Association, Geneva, 22-26th August.
To better understand sales behavior and price dispersion, this paper presents a substantially generalized clearinghouse framework. The framework can permit multiple dimensions of rm heterogeneity, and views rms as competing directly in utility rather than prices. As such, the paper can i) reproduce and extend many equilibria from the existing literature, ii) offer a range of new results on how rm heterogeneity affects sales behavior and market performance, iii) provide original insights into the number and type of rms that engage in sales, and iv) offer a foundation to assess and extend current empirical procedures.